Row over $28m targeted rate heats up
Accommodation providers want breakdown of Ateed spending
Commercial accommodation providers targeted by Auckland Council to pay for promoting the city are concerned about a lack of information on the agency they are being asked to fund.
Tourism Industry Aotearoa says because accommodation businesses are being targeted for $27.8 million to fund Auckland Tourism, Events and Economic Development, they should know more about how the money is being spent.
“Despite requests, no breakdown has been provided of this expenditure,” said the TIA in a submission to Auckland Council. “The lack of information or explanation about these matters is concerning.”
But an Ateed spokeswoman said the organisation had responded to seven requests for information during the past two months and anything that had been withheld had been for commercial or privacy reasons.
As part of its annual budget, Auckland Council wants to shift the funding of Ateed from ratepayers to 330 accommodation providers, ranging from backpackers to camping grounds to big hotels.
Auckland mayor Phil Goff said the accommodation sector had profited from the boom in tourism and increased room rates so it was fair it should pay for Ateed rather than ratepayers.
Money saved could be redeployed to fund infrastructure such as roads, which also benefited the tourism sector. But the accommodation sector said it had been unfairly singled out and should not be the only sector of businesses to pay for the cost of Ateed. In its submission it said that it got 9 per cent of visitor spend in Auckland but was being asked to fund 100 per cent of council efforts through Ateed to increase this spend.
On average rates will increase 150 per cent for the affected accommodation providers and in some cases by more than 300 per cent.
The TIA said over half of Ateed’s spending — $14.4m — was on promotion believed to include the World Masters Games, the NRL Nines, the V8 races and about two dozen other events. “Ateed and the council have provided no breakdown of these events in terms of their costs, revenue generated or the split between Aucklanders and nonAucklanders.”
In its budget consultation document, the council said it was diffi- cult to quantify the impact of Ateed’s investment in its events programme separate from other actors.
However, an evaluation of the economic impact of the events which Ateed’s programme contributed to in 2015/16 showed 124,550 additional visitors, 262,980 additional visitor nights and $44.7m in additional tourism expenditure.
Ateed said Auckland’s visitor economy delivered more than $7.3 billion to the region in those years, and was well on track to achieving the Auckland Visitor Plan goal of $8.24b by 2021 — just five years into the 10-year strategy.
TIA — the country’s main tourism industry organisation — said the events Ateed delivered directly itself were primarily for the enjoyment of Aucklanders and are not drivers of visits by those coming to the city. These include Diwali, the Lantern Festival, the Waka Festival and Pasifika. Other events Ateed supports such as the Santa Parade, Auckland Writers Festival and Takapuna Beach Cup were also for Aucklanders and resulted in very little increase in demand for commercial accommodation, TIA said.
“There is a clear disconnect between those who are now being asked to pay — the commercial accommodation sector — and those receiving the primary benefits — Auckland residents.”
TIA said more events that Ateed subsidised would almost all take place without the council-owned agency’s involvement. These include All Black tests, pop concerts, golf, yachting, tennis and running events.
“What needs to be determined is: what additional visitor spend is generated in Auckland from each event as a result of Ateed’s involvement?”
The budget has to be in place by July and Goff has signalled there may be room to modify the proposal. During a hearing last week councillors heard that motels and other smaller businesses on the fringes of the city were particularly hard-hit by the plan.